What 1840s “Free Banking” and the 1910s Cubist movement suggests about DeFi and economic machine evolution

This week, we look at:

  • The nature of innovation hubs, and how close groups of actors within a particular environment can be massively, fundamentally productive. Take for example the 30 million years of the Cambrian explosion.

  • The difficulty of experimenting with banking and money frameworks, the limits of traditional econometrics, and an overview of “free banking” in the 1840s.

  • How evolutionary theory can help us think about selection of economic models, and the hyper-competition and hyper-mutation that we see in crypto. DeFi protocols, like BadgerDAO and ArcX among hundreds of others, are experiments in designing different monetary policies and banking regime experiments in real time.

We have never before had such acceleration in the design space of the economic machine, subject to evolutionary pressures, built by a closely-wound nexus of developers. It is a fortune for the curious.